Thursday, May 17, 2012

America in Decline

Financial Times columnist Edward Luce has written a new book called Time to Start Thinking: America in the Age of Descent. Saying “America-Descent” has “received well-deserved acclaim and recognition not only for its superb reporting of the on-ground reality of America's current economic crisis but also because it is an unflinchlingly brave book,” Foreign Policy’s latest issue features an interview with Luce, whom the magazine tells us has “followed in [Democracy in America’s Alexis de] Tocqueville's footsteps.” High praise indeed.

So what does Luce really think of us? First, Luce’s more defensible assertions:

Ø Since 2009, “very, very few jobs were created and . . . the higher value-added jobs tended for the most part to be replaced by lower paying ones.”

Ø “American values, the first- or second-generation immigrant spirit [of] a Tiger Mom or in some Italian family in Brooklyn in which parents force kids to study at night is a truly American value.”

Ø “the swing towards celebrating the child, elevating the child, over-praising the child, boosting constantly at every opportunity the self-esteem of the child, assuming the child is a fragile little eggshell that can be broken at any moment, is something quite un-immigrant and therefore quite un-American, and also a great disservice to the child.”

Ø “Casinos, sports arenas, and convention centers don't generate income for those who've lost their jobs. The casino is a particularly apt metaphor for the intellectual bankruptcy of thinking, because, if done well, you can generate short-term income and tax revenues. But the costs are [only] pushed back a little bit further.”

Unfortunately, more of what Luce says about us seems questionable:

Ø “there is a lot of evidence in studies of other economies that . . . you have gross, Latin American-style inequality”

FACT: The World Bank’s ranking of nations by Gini coefficient, which measures income inequality, places the U.S. at 41 more equal than any Latin American country, closer to New Zealand, Australia, the U.K., and Italy than to Peru, closer to Switzerland and Ireland than to Ecuador, closer to Canada, Belgium, and France than to Costa Rica, closer to the Netherlands, Luxembourg, and South Korea than to Chile and Mexico, as close to Germany as to Brazil, and closer to Japan at the top than to Bolivia, 9th from the bottom.

Ø “The most powerful piece is also the most recent, and that is the distribution of growth since 2009 [from a] paper by Saez and Piketty from Berkeley University”

COMMENT: “Berkeley” University is a diploma mill that produces no serious academic studies. Luce most likely meant to say the University of California (Berkeley).

Ø “As America's inequality is growing to Latin American levels, social mobility has fallen to sub-European levels.”

FACT: A 2010 OECD study of social mobility ranked (chart, p. 7) the U.S. 10th of 12 measured developed nations (not dead last), just behind France and ahead of Italy and the U.K. Germany at 7th has a larger population than any nation ranked above it; Germany’s social mobility score was just 31% better than the U.S.’s. Within the U.S., a Minneapolis Federal Reserve study of household income by quintile over 2001-2007 found that 44% of those in the bottom 20% left their quintile within 6 years, 61% of those in the 4th 20% left, 58% of those in the 3rd 20% left, 55% of those in the 2nd 20% left, while 34% of those at the top dropped down—a fair amount of social mobility.

Ø “People tend to make a fetish out of Washington and blame Washington on itself, as if somehow it is just in suspension from the society that elected it. But . . . my skepticism about how easy it will be for America to rejuvenate itself stems from that fact that Washington[‘s problems are] deeply rooted in trends beyond the Beltway, in the real America.”

COMMENT: Defending Washington at the expense of the American people scores points only with our country’s national elite and their Democratic Party supporters.

Ø “if you have a proper understanding of American history and you know what role government played in American development and in American capitalism, then [what’s happening] isn't fine at all.”

FACT: Before the New Deal 80 years ago—that is, during America's first century and a half—private initiative built our nation far, far more than did our small Federal government.

Ø “what stops democracy from [working] in America? . . . we go back to the world of Latin Americanization of American society; [b]ut we also go back again to the American people.”

COMMENT: British observer Luce once again falsely “Latin Americanizes” our country; once again appeals to our elite at the expense of the masses. It's considered "unflinchlingly brave," apparently, for a foreigner to be able to insult ordinary Americans. Sad, sad, and certainly no Tocqueville lauding a free people.

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About Me

Former Hawaii State House Republican Leader, State and City economic development executive, and U.S. Foreign Service Officer stationed in East Asia and Washington D.C. Holds Ph.D. in Public Affairs (Princeton). This blog has recorded over 75,000 views.